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June 16, 2017

Amazon Eats the World

Amazon announced today that they are buying Whole Foods (otherwise known as Whole Paychecks). This is powerful for several perspectives.

Amazon is moving more and more into the real world. I’m in Beverly Hills right now. I can order from Amazon and two local grocery chains and have the food or products delivered to me in less than two hours! Now I’ll be able to have my Whole Foods delivered to me as quickly.

In addition, AMZN has been opening bookstores over the last year to experiment with different business models from traditional book stores.

What this also means is that the prices in Whole Foods stores are about to be slashed. Amazon knows how to run lean, better than Whole Foods. So we can now expect Whole Foods to compete on price with the big grocery chains which means Whole Foods revenues are about to explode.

It is also setting up a collision with Walmart. Walmart is now the country’s biggest grocer and they do an amazing job at it. Amazon is taking the high end with Whole Foods but you can bet that Amazon will find a way to dive even deeper into Walmart’s territory as the same time Walmart is trying to revive their online presence to attack Amazon.

These are two great companies but Amazon has been online longer. In addition, Amazon has made themselves a platform for all sellers so they are a bigger footprint. I never want to count out Walmart but I give the edge to Amazon.

I’m really bullish on AMZN stock! I think today’s announcement is a great opportunity for both swing traders and position traders to buy AMZN.

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